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GST Audit is not an avoidable Compliance, Chartered Accountant ensures checks and balances: ICAI President

GST Audit is not an avoidable Compliance, Chartered Accountant ensures checks and balances: ICAI President

GST Audit is not an avoidable compliance. GST Audit by a Chartered Accountant ensures maker checker concept thereby detecting inconsistencies, lapses, errors and ambiguities, if any, in complying with the provisions of GST law, said the ICAI President CA. Nihar N. Jambusaria.

The ICAI President said that, he met key Government functionaries to discuss matters related to contribution of accounting profession and its increasing role in economy. Our meeting with Smt. Nirmala Sitharaman, Hon’ble Union Finance and Corporate Affairs Minister was held to discuss our representation regarding the removal of requirement of audit and certification of reconciliation statement by a Chartered Accountant under CGST Act. We, besides other points, apprised that GST Audit is not an avoidable compliance. GST Audit by a Chartered Accountant ensures maker checker concept thereby detecting inconsistencies, lapses, errors and ambiguities, if any, in complying with the provisions of GST law.

The ICAI also submitted that Audit should not be seen as a cost to the taxpayer, rather it is an investment for him, the benefits of which are reaped over a period of time. The taxpayer is able to take corrective actions for irregularities/lapses detected during the audit thereby saving avoidable costs in terms of interest and penalties.

Further, audit also helps the taxpayers in saving on litigation expenses as errors are noticed and addressed in time. In this meeting, CA. Rajendra Kumar P., Chairman, GST and Indirect Taxes Committee also joined us. In this direction, CA. Babu Abraham Kallivayalil, Chairman, Professional Development Committee also met Finance Minister and Members in Parliament CA. Thomas Chazhikadan, CA. Suresh Prabhu, CA. Narain Dass Gupta.

He also added that, These meetings provided us the opportunity to discuss our professional matters with the dignitaries and reinstate our position as a partner in nation building. Two virtual meetings with the Secretary MCA and Jt. Secretary MCA were also held to apprise them about the networking guidelines and the proposed amendments in Industrial Training framework.

Source: TaxScan.


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GST: CBIC issues Clarification on reporting 4-digit/6-digit HSNs

GST: CBIC issues Clarification on reporting 4-digit/6-digit HSNs

The Central Board of Indirect Taxes and Customs ( CBIC ) has issued Clarification on reporting 4-digit/6-digit HSNs.

GST helpdesk is in receipt of some tickets at helpdesk wherein it was reported that certain 6-digit HSN codes are not available in HSN Master/ not accepted on e-invoice/e-Way bill portals.

Background: Notification No. 12/2017-Central Tax dated June 28, 2017, as amended vide Notification No. 78/2020 – Central Tax, dated October 15, 2020, mandates taxpayers to declare specified digits, as follows, of Harmonised System of Nomenclature (HSN) / Service Accounting Code (SAC) Code on raising of tax invoices, w.e.f. April 1, 2021.

S. No. Aggregate Turnover in the preceding Financial Year
1. Upto INR 5 crores
2. More than INR 5 crores

Number of Digitals of HSN Code
4
6

It may be noted that specific 6-digit HSNs, as available in the HSN/Customs Tariff (with corresponding description of goods) are allowed in the system. It also follows that the declaration of HSN at 4/6 Digits has to be out of valid HSN codes only.

However, there are instances that some taxpayers are trying to report truncated first 6-digits out of an otherwise valid 8-digit HSN; which are actually not available in Tariff at 6-digit level and with no corresponding description of goods; these are invalid and hence not being allowed in the System.

Taxpayers may, therefore note that based on the harmonious interpretation of the Notifications, as referred above, read with Customs Tariff Act, 1975, as made applicable to GST; the number of digits of HSN, as specified vide Notifications No. 12/2017 & 78/2020 (Central Tax), are the minimum number of digits of HSN to be mentioned on the invoice.

Example: Where HSN 6 digits are specified to be reported in invoice, valid HSN codes as available in tariff, at both 6-digits and 8-digits can be mentioned. Similarly, where HSN at 4-digits are specified, valid HSN codes as available in tariff, at 4-digit, 6-digit and 8-digit can be mentioned. However, the 4/6 Digit HSN Codes, which are not available in the tariff; along with specific description, Unit and GST Rate; are not allowed to be mentioned.

Further, if the HSN of any Goods/Service is otherwise valid but not accepted on GST Portal / e-invoice Portal / e-way Bill portal, please raise a ticket on GST Self-Service Portal: https://selfservice.gstsystem.in/ > Report Issue > Type ‘HSN’ in ‘Type of Issue/Concern’ search box > Select relevant sub-category, e.g. ‘e-Invoice – IRP – HSN Code related’.

Source: TaxScan 

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Few more days to file your GST Annual Return Form GSTR-4: Know Complete details

Few more days to file your GST Annual Return Form GSTR-4: Know Complete details

The last date of Annual Return Form GSTR-4 is April 30, 2021, so file your annual return without a late fee.

The GSTR-4 is a GST Return that has to be filed by a composition dealer. Unlike a normal taxpayer who needs to furnish 3 monthly returns, a dealer opting for the composition scheme is required to furnish only 1 return which is GSTR 4 once in a year by the 30th of April, following a financial year.

Salient Features of GSTR 4 Return Form

Firstly, GSTR 4 Returns will file on an annual basis for compounding Taxable persons. The last date for filing the GSTR- 4 (CMP-08) payment form is the 18th of the month following the quarter. GSTR 4 (CMP-08) returns can be filed on 18th April, 18th July, 18th October, and 18th January, and so forth.
Secondly, GSTR 4 Form is filed by all the taxpayers who registered under the composition scheme.
Thirdly, business entities registered under the composition scheme will be required to pay taxes at fixed rates quarterly without availing input tax credit facility.
Fourthly, the taxpayer will be required to show the total value of supplies made in a specific period and tax paid at the composition rate.
Fifthly, the taxpayer will be required to insert invoice- level purchase details for the purchases from normal taxpayers, which will be automatically updated GSTR 4A Form from supply invoice uploaded by the opposite party in GSTR 1.

Procedure for filing GSTR 4 Return Form

GSTR 4 return form is divided into 13 sections but it is not necessary to fill all these sections.
1.GSTIN
Every Taxpayer gets a state-wise PAN-based 15 digit Goods and Services Taxpayer Identification Number (GSTIN) from the Government. It must be noted that the identification of the taxpayer will be automatically filled at the time of filing return in the coming future.

2. Legal Name of the Registered Person and Trade name
The taxpayer name will automatically fill time of filing the returns at GSTN portal

3. Annual Turnover in the preceding Financial Year
A taxpayer will be required to fill all the information only for the first time of filing and after then it will be automatically updated in the succeeding years.

4. Inward supplies including supplies on which tax is to be paid on reverse charge
Inward supplies received from a registered supplier (other than supplies attracting reverse charge), the information will be auto-populated from the provided by the supplier in GSTR-1 and GSTR-5. Inward supplies received from a registered supplier (attracting reverse charge- this information will be automatically filled from the information provided by the supplier in GSTR-1, inward supplies received from an unregistered supplier, and Import of service. It must be noted that all inward supplies to composition will auto-filled here.

5. Amendments to details of inward supplies furnished in returns for earlier tax periods in Table 4
It will include amendment information mentioned in earlier tax periods and also original amendments of debit or credit note received, rate-wise. Place of supply to be mentioned in case if the same is different from the location of the recipient. While providing the information of the original debit /credit note, the details of the invoice must be provided in starting three columns, whereas, providing the revision of the details of the original debit /credit note shall be provided in the first three columns of Table.

6. Tax on outward supplies made
Under this section, you will provide the details of a tax rate, total turnover, out of turnover reported, and the composition tax amount including both central tax & State/UT tax.

7. Amendments to Outward Supply details furnished in returns for earlier tax periods in Table No. 6
Under this section, you will be able to rectify the incorrect details you provided in Table 6 in previous returns, without turnover reported details additionally added.

8. Consolidated Statement of Advances paid/Advance adjusted on account of receipt of supply
Under this, details of the advance paid relating to reverse charge supplies and if you paid taxes on them, adjustments against invoices issued to be mentioned in Table 8.

9. TDS Credit received
The Tax Deduct at Source will be auto-filled in Table 9.

10. Tax payable and paid
Under this section, you will be to provide the details of Integrated Tax, Central Tax, State/UT Tax, and cess tax amount payable as well tax amount paid

11. Interest, Late Fee payable and paid
This section for those taxpayers who have not paid the taxes timely.

12. Refund claimed from Electronic cash ledger
If in case the tax liability of the composition dealer is below than the TDS deducted, he can get a refund of balancing amount. The amount which is available for the refund will auto-filled under this section.

What happens after Form GSTR-4 (Annual Return) is filed?
After Form GSTR-4 (Annual Return) is filed:
1. ARN will be generated on successful filing of the Form.
2. An SMS and email will be sent to the mobile number of the authorized signatory on the successful filing of Form GSTR-4 (Annual Return).
3. Electronic Cash Ledger and Electronic Liability Register Part-I will get updated.

Late Fees and Penalty
A late fee of Rs. 200 per day is levied if the GSTR-4 is not filed within the due date. The maximum late fee that can be charged cannot exceed Rs. 5,000.

Source: TaxScan.

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Know 12 New Functionalities made available for Taxpayers on GST Portal

Know 12 New Functionalities made available for Taxpayers on GST Portal

The Goods and Service Tax Networks (GSTN) has made available new functionalities pertaining to registration, returns, audit, front office, and Webinars Conducted for Taxpayers on GST Portal.
1. Assignment of new applications of registration, in certain cases, with same PAN and in same State/ UT
New registration applications of the applicants, whose previous application for registration were either rejected by Tax Officer or whose GSTIN was cancelled (either suo-moto or if surrendered by the taxpayer), will now be assigned to the respective authority of the State or Centre (who have earlier rejected the same), whenever these applicants/ taxpayers apply for registration under the same PAN and within the same State/ UT.
• Aadhaar Authentication enabled for Persons/ applicants applying for GST registration through MCA portal in SPICe -AGILE Form
The persons/ applicants applying for new registration in GST, through MCA portal in SPICe -AGILE Form, can now opt for Aadhaar Authentication (while applying for registration).
• Disabling entering Aadhaar number by Taxpayers/Applicants in registration application
The field for entering Aadhaar number has been disabled for Taxpayers in two scenarios.
Firstly, while adding Authorised Signatory/Authorised Representative through Non-Core amendment of registration.
Secondly, while adding Promoter/ Partner through Core amendment of registration.
The Applicants/ taxpayers adding details of Authorised Representatives in the New Registration application.
• Selection of Core Business Activity by existing Taxpayers on the GST Portal
The existing taxpayers have been provided with a functionality on the GST portal to select their core business activity. They can select one of the categories as their core business activity, based on their turnover namely Manufacturer, Wholesaler/Distributors/ Retailers, and Service Providers and others
• Reset button enabled on GST Portal for Form GSTR1/ IFF
Normal taxpayers, irrespective of their filing profile (of quarterly or monthly), have now been provided with a RESET button on the GST Portal, in Form GSTR-1/IFF. This will enable them to delete the entire saved data, for the specific return period, but not yet submitted or filed their Form GSTR-1 or Invoice Furnishing Facility (IFF).
• Reporting and paying interest & other amounts, in Form GSTR-5A by OIDAR registrants
A person registered as OIDAR can now declare interest and any other liabilities in Table 6 i.e. Interest or any other amount of their Form GSTR 5A and discharge it through Electronic Cash Ledger.
• Download of Table 5 data, after filing, enabled for Form GST ITC-04
The registered manufacturers who are required to file quarterly Form GST ITC-04 (to furnish details of inputs or capital goods, sent to a job worker without payment of tax), can now download the data of Table 5 of Form GST ITC-04 (on the GST Portal), after filing the Form, when there is change in the state code, due to merger or creation of a State/ UT. This is to download data, when there is change in State/ UT code, before the goods are received back.
• Filing of refund application in Form GST RFD-01, by exporter of services, in cases of Foreign exchange fluctuations
The system earlier validated the refund amount claimed by the exporter of services (with payment of tax), against the proceeds realised (against exports, as submitted by the claimant in form of FIRC). If the value realised mentioned in BRC/FIRC column, was less than the refund amount claimed, then such taxpayers were not allowed to file their refund application on GST Portal. This validation has now been removed and taxpayers will be able to file refund applications now in such cases (As the value realised in BRC/FIRC may fluctuate due to foreign exchange fluctuations and net realisation may be less than the refund amount).
• Audit related functionalities made available to taxpayers
All notices and reports issued by tax officials will be available to taxpayers under ‘Additional Notices and Orders’. Taxpayers can reply to the audit notices and can upload documents. Taxpayers can accept/reject/pay the liabilities, discrepancy-wise, as outlined in the Notice for Discrepancies or in Addl. Notice for Discrepancies (if any) or in Audit Report (Form GST ADT-02). Taxpayers can apply for Adjournment or for extension of the date of Audit to the tax officer.
1. Status of Aadhaar authentication or E- KYC verification of a GSTIN in search taxpayer functionality
In the Search Taxpayer functionality (both pre-login and post login), the user will now be shown status of Aadhaar authentication or E-KYC verification of the searched GSTIN.
1. Change in label and functionality of HSN / Service Classification Code Tax Rate search
The label for “Search HSN / Service Classification Code Tax Rate” has now been changed to “Search HSN Code”. The functionality also has been enhanced wherein if the user searches for an item or a HSN code, the output is displayed systematically under the associated Chapter head, the description of the keyed- in HSN code and also other associated HSN codes (all hyperlinked) along with it. (Services> User Services > Search HSN Code).
1. Webinar
The Webinar on e-Invoicing for Taxpayers especially for those who are going to start e-invoicing from March 1, 2021 onwards.

Source: TaxScan. 

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Effortlessly!!!

Our GST software enables you to file your GST returns free of any hassle. Get more details by writing to us at gst@xattax.in.

Government allows further operational flexibility to GST filers

Government allows further operational flexibility to GST filers

The government has allowed further flexibility to tax filers operating under the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) scheme of GST.

These tax filers will now be permitted to declare invoices pertaining to movement of goods and services in their quarterly return form GSTR 1 to be filed in the last month of each quarter.

As per an advisory issued by the Goods and Services Tax Network (GSTN), the taxpayer must ensure that any saved but not Filed/Submitted IFF (Invoice Furnishing Facility) records for the first two months of the quarter i.e. month of Jan-2021 or Feb-2021 must be deleted using RESET button before filing GSTR-1 for Jan-Mar-2021 quarter.

The advisory added that the deleted records should be added in GSTR-1 for Jan-Mar-2021 quarter after deleting the saved records from IFF. In future this may not be required as invoices already saved in any of the months on the quarter may be either deleted/moved to quarterly GSTR-1 by a functionality to be introduced shortly.

The advisory also said that any submitted but not filed IFF for the month of Jan-2021 or Feb-2021 must be filed before filing GSTR-1 for Jan-Mar-2021 quarter.

The advisory has been issued for filing quarterly GSTR-1 for January – March 2021 under QRMP scheme.

The taxpayers under QRMP scheme have a facility to file Invoice Furnishing Facility (IFF) in first two months of the quarter and file Form GSTR-1 in third month of the quarter. As IFF is an optional facility it cannot be filed after the end date (13th of the month succeeding the IFF period).

The document saved in IFF, where taxpayer has not filed by the end date, cannot be filed anymore. Hence taxpayers have a been asked to declare such document in the GSTR-1 for the quarter.

Source: Business-Standard.

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GST collections hit record high of Rs 1.24 lakh crore in March

GST collections hit record high of Rs 1.24 lakh crore in March

GST collections rose 27% to hit a record high of nearly Rs 1.24 lakh crore in March, helping to narrow the deficit for the full financial year to around 7%.

The mop-up — based on sales in February 2021, for which returns were filed in March — was boosted by imports with revenue from imported goods jumping 70%, while those from domestic transactions, including services imports, were 17% higher than the corresponding period in 2020.

The impact of the coronavirus pandemic was first seen in February 2020 when the lockdown in Wuhan resulted in a disruption of shipments coming from China, where the deadly virus was first spotted.

“GST revenues crossed above Rs 1 lakh crore mark at a stretch for the last six months and a steep increasing trend over this period are clear indicators of rapid economic recovery post pandemic. Closer monitoring against fake billing, deep data analytics using data from multiple sources including GST, income-tax and customs IT systems and effective tax administration have also contributed to the steady increase in tax revenue over last few months,” the finance ministry said in a statement.

Although the base effect will come into play in the coming months, there has been a sustained recovery with collections rising 14% during the March quarter compared to 8% during October-December 2020. During the first half of 2020-21, GST collections had declined following the lockdown.

“It (collection growth) clearly shows a sustained economic recovery and also is a result of GST audit closures and the government tightening compliance and anti-evasion measures,” said Pratik Jain, who leads the indirect tax practice at consulting firm PwC.

What is providing even more comfort to experts is the growth in collections across all the states. “In addition to the trend of higher overall GST collections over the past six months, all major states have shown a significant increase compared to the previous year. Further the increase in collections on imports accompanied by the increase in domestic transactions would indicate that the overall production/consumption cycle is back to normal,” said MS Mani, senior director at Deloitte India.

Source: Times-Of-India. 

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GST: Govt. issues Advisory on Opting-in for Composition Scheme for Financial year 2021-22

GST: Govt. issues Advisory on Opting-in for Composition Scheme for Financial year 2021-22

The Goods and Services Tax Network (GSTN) has issued Advisory on Opting-in for Composition Scheme for Financial year 2021-22.

How to opt-in for Composition Scheme:
1. The eligible registered taxpayers, who want to opt-in for composition scheme for the FY 2021-22, need to file FORM GST CMP-02 application, on or before 31st March, 2021, post login on GST portal. The taxpayers may navigate as follows:

Log-in>Services > Registration > Application to opt for Composition Levy>Filing form GST CMP-02>File application under DSC/EVC

1. Once Form GST CMP-02 application is filed, the composition scheme will be available to the taxpayer, w.e.f. 1st April 2021.
2. The taxpayers already opted in for composition scheme earlier are not required to opt in again for FY 2021-2022.
3. Taxpayers who were regular taxpayers in previous FY, but are opting-in for composition scheme for 2021-22, must file Form GST ITC-03 for reversal of ITC on stocks of inputs, semi-finished goods and finished goods available with them, within 60 days from the effective date of opting in.

Who is eligible for opting-in for Composition Scheme:– Following Normal taxpayers, who don’t want to avail ITC facility, may opt for this scheme:

1. having aggregate turnover (at PAN level) upto Rs. 1.5 Crore in the previous FY.
2. having aggregate turnover (at PAN level) upto Rs. 75 lakh in the previous FY and who are registered in Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura & Uttarakhand.
3. supplying services and/or mixed supplies having aggregate turnover of previous FY upto Rs. 50 lakhs.

Who is not eligible for opting in composition scheme:
1. Suppliers of the goods/services who are not liable to pay tax under GST
2. Inter-State outward suppliers of goods/services
3. Taxpayers supplying goods through e-commerce operators who are required to collect tax under sec 52
4. The manufacturers of notified goods like Ice cream and other edible ice, whether or not containing cocoa, tobacco and manufactured tobacco substitutes, Pan Masala & Aerated water

Source: TaxScan.

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GST technical glitches behind input tax credit frauds: CAG report

GST technical glitches behind input tax credit frauds: CAG report

The Comptroller and Auditor General (CAG) of India has found that the goods and services tax (GST) system is prone to input tax credit (ITC) frauds due to complexity in the compliance system.

“The originally envisaged system-validated ITC through ‘invoice matching’ had not been implemented. The complexity of return mechanism and technical glitches had resulted in roll-back of key GST returns, rendering the system prone to ITC frauds,” CAG said in its report submitted in Parliament on Wednesday.

The GST returns system is still a work in progress despite more than three years of roll-out, it said. “In the absence of a stable and simplified return mechanism, one of the main objectives of GST rollout — simplified tax compliance system — is yet to be achieved,” the report said.

CAG recommended fixing a definite time frame for rollout simplified returns forms as frequent deferments are resulting in a delay in its stabilisation and continued uncertainty in the GST ecosystem. During October 2018 to March 2020, CAG examined records relating to 4,736 of 23,106 refunds in 33 Central GST (CGST) commissionerates. It noticed non-adherence to extant provisions in processing refunds in 280 claims (6 per cent) involving an amount of Rs 16.16 crore.

“We observed instances of irregular grant of refund due to non-consideration of minimum balance in electronic credit ledger, irregular sanction of refund of input tax credit availed of on capital goods, etc,” the report said.

GST shortfall

The CGST revenue was short of the Budget Estimates and the Revised Estimates during 2018-19 and 2019-20. The shortfall vis-à-vis Budget Estimates was 22 per cent and 10 per cent for the years, respectively. Also, CGST revenue grew 2.97 per cent in FY20 over FY19. CGST revenue as a percentage of GDP, however, declined from 3.08 per cent in FY19 to 2.95 per in FY20.

The share of GST remained constant at 62 per cent of the direct tax collections during the last two years (FY19 and FY20).

To a query over this, the finance ministry said on the recommendations of the GST Council, rate rationalisations have been implemented from time to time by the government and, therefore, the actual indirect tax collections may vary with regard to the target set for a financial year.

It should be noted that in December 2015, the report on the revenue neutral rate and structure of rates for GST recommended the range of 15-15.5 per cent as the revenue neutral rate. However, the effective weighted average GST rate as of July 2019 was 11.6 per cent.

In addition, the GST Council revised the threshold turnover limits upwards for registration of taxpayers and the composition levy scheme, which affected GST collections, the ministry said.

Source: Business-Standard

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Taxpayers can use ITC to discharge GST dues for March

Taxpayers can use ITC to discharge GST dues for March

The Finance Ministry on Saturday said GST taxpayers can utilise the Input Tax Credit available in their credit ledger to discharge their GST dues for the month of March.

“Taxpayers are free to utilise the Input Tax Credit available in their credit ledger, as permissible in law, to discharge their GST dues for the month of March, 2021 – the last month of this financial year,” the Central Board of Indirect Taxes and Customs (CBIC) said in a statement.

Goods and Services Tax (GST) collections crossed the Rs 1 lakh crore mark for the fifth month in a row in February. The mop up in February was Rs 1.13 lakh crore.

Source: Economic-Times

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GST: ITC to be availed based on details available in FORM GSTR-2B, clarifies CBIC

GST: ITC to be availed based on details available in FORM GSTR-2B, clarifies CBIC

The Central Board of Indirect Taxes and Customs (CBIC), via its Twitter, handle clarified that Input Tax Credit ( ITC ) can be availed based on details available in FORM GSTR-2B.

The department was responding to an inquiry from one Mr. Rahul Modi, who asked whether the Goods and Service Tax Network (GSTN), whether ITC needs to be claimed as per 2A or 2B.

“Many clients are filing their GSTR 1 after 12th of the months which gets reflected in 2A but not in 2B which shows difference in ITC with auto populated data,” he added.

The GSTN responded that it was a policy-related issue and has been forwarded to the Government.

“Input tax credit is required to be availed based on details available in FORM GSTR-2B, which is a static ITC statement generated for each month,” the Board tweeted.

Dear Taxpayer,

Input tax credit is required to be availed based on details available in FORM GSTR-2B, which is a static ITC statement generated for each month.
— CBIC (@cbic_india) March 15, 2021

Source: TaxScan.

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Our GST software enables you to file your GST returns free of any hassle. Get more details by writing to us at gst@xattax.in.